Alaska Progress Report

Alaska's April 2012 unemployment rate was 6.9 percent

From the Alaska Department of Labor: "Alaska’s seasonally adjusted unemployment rate for April was 6.9 percent, essentially unchanged from 7.0 percent in March. The comparable national rate was 8.1 percent, down one-tenth of a percentage point. The U.S. and Alaska rates have both declined gradually but consistently in recent months, although unlike Alaska’s rate, the U.S. rate remains signifi cantly higher than pre-recession levels.

"Job numbers show the same pattern. U.S. employment is still about five million below its January 2008 peak, while Alaska quickly recovered after the mild job losses of 2009. Preliminary estimates for 2012 show a continuing trend of modest job growth in Alaska. Unemployment rates around the state, which are not seasonally adjusted, fell in all but one region in April as the labor market geared up for summer. Juneau’s rate of 4.8 percent was the state’s lowest, and the Wade Hampton Census Area’s was highest at 21.4 percent. Rates tend to decline over the spring and summer as many Alaskans take seasonal jobs in fi shing, seafood processing, construction and tourism."

2012 Resource Extraction 10-Year Project Projection

It's a project projection, it's a project projection! From the Anchorage Economic Development Council comes the 2012 Resource Extraction 10-Year Project Projection, a review of "...over sixteen oil, gas and mining projects in the state over the next ten years and the economic impacts of these projects."

From the executive summary, compared to last year's report, "...very little has changed other than another year has gone by with only slight progress in moving the described projects forward. In effect, the opportunities and benefits those projects represent for Alaska’s economy moved another year or more away from reality... As was the case in 2011, AEDC’s perspective on the outlook for these projects is not optimistic. Alaska’s competitiveness in the global markets within which we compete, is not favorable in many ways... social compact, taxation, ermitting, litigation, commodity pricing, high costs related to project development and access to needed infrastructure have reached a point of, what is effectively, gridlock for many proposed projects. Compounding these challenges is a clear lack of agreement among Alaskans on a common vision for Alaska’s economic future."

Alaskans not agreeing on a common vision? We're shocked, shocked and appalled (we're neither).

Summer 2011 visitor study

The Alaska Visitors Statistics Program gives a window into Alaska's vital tourism industry. The latest in these periodical studies is for summer 2011. Visitation was 1.56 million out-of-state visitors, which is an increase over summer 2010, but less than the historical peak in 2007 of 1.71 million.

Of these:

• 57% arrived by cruise ship, 39% by air, and 4% by highway/ferry.
• 77% were here for vacation.
• 66% bought a multi-day package.
• 68% visited Southeast, 56% Southcentral, 33% Interior.
• Juneau was the top destination with 61% of visitors.
• 71% of visitors were very satisfied, 27% satisfied.
• 69% shopped, 52% viewed wildlife, 49% attended cultural activities, and 39% went on sightseeing tours.
• 36% were from the Western US, 22% from the South.
• 52% were age 55 plus.
• Visitors spent an average of $941 per person per trip, excluding transportation to/from Alaska and any cruise tours.

Spending has been flat since 2006, with inflation eroding the value of the total spent by visitors in Alaska by 11% in that time.

2012 Alaska salmon forecast lower

The Alaska Department of Fun & Games Fish & Game has released its 2012 salmon forecast, summarized by the Anchorage Daily News: "The total catch forecast by the Alaska Department of Fish and Game is 132 million salmon, down 25 percent from the 177 million fish taken in 2011.

"The statewide breakdown is 120,000 king salmon (in areas outside Southeast, where catches are dictated by treaty with Canada); 38.4 million sockeye salmon, a decline of 4 percent; 4.3 million coho (similar to last year); 19 million chums, 12 percent higher; and 70.2 million pinks, a 40 percent decrease.

"Each year's annual report on salmon harvest projections also includes a detailed review of the 2011 season for every Alaska region. In all, the fishery produced a catch valued at $603 million at the docks, the third-highest ever."

Economic impact of national park visitors in Alaska

The National Park Service released Economic Benefits to Local Communities from National Park Visitation and Payroll, 2010. Alaska received 2.3 million visitors in 2010 for a total economic impact of $208 million. The report notes the difficulty of estimating local spending in Alaska because most park visitors do their spending far from the actual park due to their remoteness.

The Anchorage Daily News has a more readable summary of the report. Various other reports and data are available at the Park Service website.

Alaska has fastest growing senior population

The always-fascinating United States Census delivers some interesting data on senior citizens at the state level. Turns out that in the decade 2000 to 2010 Alaska's 65+ population grew at the fastest rate in the nation.

The total population grew 13.3 percent in Alaska versus 9.7 percent nationwide. That's nothing: the 65+ population in Alaska grew 53.9 percent versus 15.1 percent (the next highest: Nevada at 48.2 percent), and the 85+ population grew 78.9 percent versus 29.6 percent (next highest: Nevada again at 77.7 percent).

Alaska is still the youngest state out there, but the increased availability of services, especially health care, is allowing many older Alaskans to age in place and, not inconsequentially, contribute $1.5 billion a year to the economy.

Rural energy costs up to five times higher than Anchorage

From a recently completed Commonwealth North study, Energy for a Sustainable Alaska: The Rural Conundrum: "Recent studies have demonstrated that the poorest households in rural Alaska spent up to 47% of their income on energy in 2008, more than five times their Anchorage neighbor. Given the meteoric rise in the cost of oil since then, estimates of the burden today are significantly higher.

"The Commonwealth North Rural and Alterative Energy Study Group received presentations from regional organizations on energy plans in various stages of developments. Virtually all the plans included some version of renewable energy - generally still in the early concept design stage - and interconnection of communities to that generation source. All the plans appeared to be very high cost, upward of $500 million per region, and none would dramatically lower the cost of energy without massive government subsidies.

"The Renewable Energy Fund, established in 2008, is authorized to underwrite $250-300 million of energy projects, but with projects for small communities coming in at $4-5 million each, it is likely that per-community renewable solutions will cost $2 billion statewide, and will at best keep electricity prices stable into the future. Heat and transportation fuel substitutions will greatly increase this number."

Construction spending to rise in 2012

The latest research from the Institute of Social and Economic Research predicts a sunny outlook for construction spending in 2012 in Alaska:

• The total value of construction spending “on the street” in Alaska in 2012 will be $7.7 billion, up 3% from 2011.
• Wage and salary employment in the construction industry will be stable at the same level as last year—15,800. This is down from a peak of 18,300 in 2005.
• Excluding the oil and gas sector—which accounts for 41% of the total—construction spending will be $4.6 billion, up 4% from 2011 and about the same rate of increase as last year.
• Oil and gas spending will be $3.2 billion, 1% higher than in 2011.

The report spotlights how important construction is to the economy: "Annual wage and salary employment in the construction industry in 2011 was about 16,000 workers, with average annual payroll of $70 thousand per worker, second only to mining (including petroleum). But that figure doesn’t include the “hidden”  construction workers employed in other industries like oil and gas, mining, utilities, and government (force account workers). In addition, it does not account for the large number of self-employed construction workers—estimated to be about 9,000 in 2011."

North Slope employment at all-time high, 35 percent nonresident

Alaska consultancy McDowell Group has released Oil and Gas Industry Employment on Alaska's North Slope. Findings from the executive summary are in three sections:

"Total Employment:

• On a monthly average basis, North Slope oil industry employment climbed to an all-time high in 2011. Employment averaged just under 9,000 jobs through November, about 500 jobs more than in 2010.
• North Slope oil and gas industry employment more than doubled over the past ten years, adding 5,000 jobs since 2000.
• Reports of declining North Slope employment in 2009 were accurate. Over an 11-month period beginning in December 2008, North Slope employment fell by 1,200 jobs, a 13 percent decline, before returning to a growth trend.

"Work Activity:

• Rapid growth in North Slope employment has occurred while oil production continues its steady long-term decline. Oil prices rising to record levels incentivized new development activity and projects aimed at enhancing recovery from mature fields. Historically high oil prices, coupled with necessary major investment in renewal of the aging Prudhoe Bay infrastructure, are primary drivers of the recent rise in North Slope employment.
• Reported North Slope-related spending totaled $4.9 billion in FY2011, marking at least the fourth consecutive year in spending growth (earlier comparable data is not available). Since FY2007, annual spending has increased by about $1.3 billion.
• Though North Slope industry-wide data is not available, North Slope oil producers report significant shifts in spending for maintenance at core fields. For example, one key firm (ConocoPhillips CPAI) reports that annual gross maintenance spending at Prudhoe Bay, Kuparuk, and Alpine is $800 million more per year than it was five years ago while development spending is unchanged.

"NONRESIDENTS IN THE NORTH SLOPE LABOR FORCE

• According to the most recent estimates, 35 percent of North Slope oil and gas industry workers are nonresidents. This percentage has been relatively steady over the past few years, and was at a four-year high of 37 percent in 2006.
• Nonresidents accounted for 56 percent of all North Slope oil and gas industry new-hires during the third quarter of 2010, the highest nonresident new-hire rate in any quarter in the 2004 to 2010 period. New-hire data reflects the number of job openings that occurred during the quarter, either through new job creation or turnover. It is not a measure of overall job growth.
• The 2010 annual nonresident new-hire rate was 44 percent, also the highest annual rate in the past seven years. The second highest rate was 40 percent in 2008.
• This nonresident new-hire data indicates an uptick in nonresident participation, but the overall increase is likely to be within historical norms. Nonresident new-hire rates are typically higher than overall nonresident participation rates because short-term, seasonal jobs are more often filled by nonresidents.
• Resident and nonresident oil and gas industry workers on the North Slope earn about equal wages."

Alaska gets mixed grades for assets and opportunity

OK, we've never heard of the Corporation for Enterprise Development either, but they've got an "assets and opportunity" scorecard out that grades Alaska in five areas:

• Financial Assets and Income: B
• Business and Jobs: A
• Housing and Homeownership: A
• Health Care: C
• Education: C

Given some of the recent bad news on Alaska's relative educational performance (a legislative research report says our college graduation rates were dead last nationally in all but two years from 1997 through 2009, and high school graduation rates are below the national average) that seems like a generous grade.

Still, our overall ranking is sixth, so that's better than a poke in the eye with an oosik.